There’s little doubt that the deal between Interbrand and Newell and Sorrell makes good business sense. Both are profitable, and have healthy client lists, and they bring together proven naming and branding strengths.
Both stand to gain something tangible from a merger. Interbrand can tap into Newell and Sorrell’s reputation for creativity and gain a foothold in The Netherlands through its Amsterdam office; N&S, meanwhile, will be able to extend its international reach through Interbrand Group’s global network.
The fit appears to be about as good as you can get, which is perhaps why the deal was struck in record time. John Sorrell, who becomes chairman of Interbrand Newell and Sorrell in January when his consultancy formally joins with Interbrand UK, has said many times that N&S “is not for sale”. The latest denial came in July, when US group Diefenbach Elkins was believed to be sniffing about (DW 25 July). There have been approaches over the years, but the call from Interbrand Group chief executive Charles Brymer in mid-July was different.
“It was so flattering,” says N&S co-chair Frances Newell. “They were interested in the bits we are good at, such as design, and a cultural fit.” The groups have also known each other since they met over the InterCity identity some ten years ago.
The speed with which the deal went through is down to “a genuine determination on both sides to get things done”, says Interbrand deputy group chairman Tom Blackett.
What tempted N&S was the opportunity to move the 21-year-old consultancy into another phase, says Sorrell, who is openly excited at the prospect. “It’s a new chapter opening,” he says. “We want to be a business at the leading edge creatively, in terms of design, and intellectually through brand valuation and new-product development.”
It’s hardly surprising, therefore, that neither he nor Newell, who with other N&S shareholders gain financially from the deal, are planning to cash in their chips.
The strengths as Sorrell sees them include the chance to put together international teams of the best people for the job, drawn from the 200-strong combined forces of the two groups. There’s also scope to send staff abroad, to broaden their experience. This already happens within Interbrand UK, says Blackett, citing South Africa and Colombia as recent destinations.
The real question about the deal is how two very different cultures will merge. “That’s the thing that’s interesting,” says N&S non-executive director Michael Woolf, “I’m glad it’s happening and I’m glad I’m involved.”
N&S is a creative “village” of 100 people based in north London and Amsterdam. It’s a culture that cares, with nurturing at its heart, embodied in its cafÃ© and legendary Utopian Nights lectures, and high creative standards. There’s also a political dimension, Sorrell having chaired the Design Business Association and, since 1994, the Design Council. Over the past couple of weeks, you’ve hardly been able to switch on the TV without seeing him.
Interbrand is different. You feel there are more “suits” around the Covent Garden office in London. It has its football and softball teams and a Friday night drinks party, but, seen from the outside, it has no special culture. To those in design and to clients, characters like creative director Chris Lightfoot – “riding high” over the merger – are well known and Blackett says it is proud of its people, but to the world at large there’s an anonymity.
All concerned are excited at the prospect of bringing the two together, particularly Newell, who gains the overarching title artistic director from the deal. “The whole approach will be to do with quality and culture,” she says, indicating that any structure will be based on small creative “centres” to allow individual contributions. It’s about ideas, says Sorrell, who sees it as “an opportunity to develop new products” and become a “winning business”.
We’ll have to wait to see how it works. Architect Fletcher Priest is restructuring N&S’s offices to take the whole group within the next six months. Meanwhile, the status quo prevails as the groups grow together. “We’ll develop how we work as we move forward,” says Sorrell. “One thrill is not quite knowing what we’re doing.”
Newell and Sorrell
Offices: London and Amsterdam
Turnover: 8m (forecast for 1997)
The Interbrand Group
Parent company: Omnicom since 1993
Staff: 500 worldwide
(90 in London)
Offices: London, New York, Chicago, San Francisco, Milan, Hamburg, Cologne, Zurich, Tokyo, Osaka, Seoul, Singapore, Sydney, BogotÃ¡, Jakarta and Johannesburg
Turnover: 34m, including 9m in the UK (forecast for 1997).